The recent NDRC press conference left many investors disappointed as details on stimulus measures were lacking. Analysts, such as Christopher Wong from OCBC, noted that the lack of follow-through on promised stimulus has caused the bullish momentum on the daily chart to stall. The USD/CNH exchange rate was last seen at 7.0582, with several CNH-sensitive currencies such as the AUD, KRW, and MYR being affected by the market sentiment shift.
The initial optimism from the opening rally in Chinese equities quickly faded as investors were left wanting more concrete plans from policymakers. The uncertainty surrounding the lack of details on China’s stimulus package has caused the USD/CNH to face two-way risks in the near term. Market participants are closely watching the daily fix to gauge policymakers’ comfort level with the recent price action of the RMB, as well as keeping an eye on the potential impact of US exceptionalism ahead of the upcoming elections.
Despite the disappointment over the lack of clarity on stimulus measures, the bullish momentum on the daily chart remains intact. The RSI indicator has risen, indicating a positive trend in the exchange rate. Key levels to watch for include support at 7.0320 and resistance at 7.11, which is the 50 DMA level. Investors are advised to closely monitor these levels and market developments for any potential shifts in market sentiment.
Overall, the lack of details on stimulus measures from the NDRC press conference has dampened market sentiment and led to a stall in the bullish momentum on the USD/CNH exchange rate. With uncertainties surrounding China’s stimulus plans and the upcoming US elections, market participants are bracing for potential two-way risks in the near term. It is crucial for investors to stay informed on the latest developments and key levels in the exchange rate to make informed trading decisions in the current market environment.
